KASB placed under moratorium by SBP – will remain open

The State Bank of Pakistan announced in a clarification that offices and branches of KASB Bank will operate as per routine for deposit holders as SBP has not suspended its operations. The bank will make payments up to Rs 300,000 to its account holders. Around 93% bank depositors would be able to withdraw their total deposits if they desire. The rest would be able to withdraw amount up to PKR 300,000. The Bank’s customers could also operate their lockers; borrowers could also repay against their loans keeping in view, the terms and conditions agreed.

The State Bank of Pakistan also assured that Pakistan Banking sector is strong and stable; all other banks are in operation in normal manner and serve their customers in a usual manner. KASB contributes only 0.7 percent towards total deposit base of all commercial banks. The total deposit base is around PKR 8.7 trillion.

Earlier this week the State Bank of Pakistan placed KASB bank under six month moratorium restricting payments of certain debts and obligations from the bank, however, it will continue to receive all payments and recoveries due to the bank. The Central bank in order to protect interest of depositors and shareholders; while keeping in view the financial health and circumstances of the ‘Bank’, exercising its powers under Section 47 of the Banking companies Ordinance 1962, placed KASB under six months moratorium with effect from November 14, 2014.